Even if you have no idea what it means, there's a strong chance you've heard the term "NFT" being thrown around lately. Recently, one even sold for $69.3 million. Clearly, this is quite the lucrative field (if you know how to tap into it).
Fashion houses have begun to do so. In the latest trend in NFT news, fashion brands have been taking advantage of the NFT market in a number of ways. From exclusive drops to digital fashion, the blockchain is rapidly transforming the fashion world.
Whether you're completely new to the Metaverse and Web 3.0, or you've been investing in crypto since the beginning, the vast world of NFTs likely contains something of interest to you. This is especially true if you're a fashion nerd. Read on to discover how fashion NFTs are becoming one of the latest and greatest fashion trends.
For those new to the world of NFTs, here's a mini crash course on the subject. If you're well versed in Web 3.0, feel free to skip down to the next section.
Even if you aren't new to cryptocurrency, NFTs are a relatively new (but rapidly-growing) subsection of the sector. So, what are they exactly?
Well, NFT is an acronym. It stands for "non-fungible token." Let's break this down.
"Non-fungible" means that the item is unique and non-interchangeable. "Token" refers to the actual item, stored on something called the blockchain (we'll get into that in a second). NFTs are non-reproducible and their value is derived from the fact that it's easy to verify ownership of a particular token.
You can store almost any digital file on the blockchain as an NFT. However, within the fashion industry, NFTs largely take on the form of images. They can be representations of physical products or strictly digital items.
The blockchain is a public digital ledger that consists of a certain subset of transactions. These transactions are distributed to each computer participating in the blockchain. This making transactions easily verifiable and near-impossible to hack.
The reason it's so difficult to hack a blockchain is due to a unique cryptographic signature, called a hash. It's also decentralized. This means that the information is equally distributed amongst all the computers in the system.
NFTs are stored on a blockchain, meaning ownership of each token is easily identifiable and tokens are impossible to replicate. This gives them immense value, since they're virtually impossible to "steal."
Like NFTs, cryptocurrency is also based on blockchain technology (most are part of the ethereum blockchain). However, there's one crucial difference: whereas NFTs are non-fungible (hence the name), crypto is. Therefore, it isn't possible to trade NFTs in the same way as cryptocurrencies.
NFTs are purchased using crypto. Usually, the currency used for purchase is ethereum, but it's also possible to buy NFTs with other ERC-20 tokens.
Now that we've got the basics of NFTs down, how does fashion fit into the mix? NFTs have actually been making a splash in the fashion world for a while. RTFKT, a virtual fashion brand, sold a virtual jacket for upwards of $125,000 during the initial NFT "gold rush."
Luxury fashion brand LVMH then became of the first fashion houses to turn to blockchain transactions as a method of verifying an item's authenticity. This was revolutionary, since it meant that brands were now able to leverage NFTs as a method of backing up their intellectual property.
As luxury brands focus their marketing on the high-net-worth individuals that form the vast majority of their customer base, moving into the NFT sector has become essential. Using NFTs a a method to create brand awareness has seen more and more success. By taking advantage of the intersection between luxury and NFTs, fashion brands have begun to tap into the overlapping interests of their primary audience.
One example of this lies in Dolce&Gabbana's collaboration with digital marketplace UNXD earlier this year. Their collection, dubbed "Genesi," aimed to target the company's existing customer base.
Other luxury brands like Gucci, Burberry, and Louis Vuitton were also some of the first to tap into the NFT sector. They did so both by dropping digital versions, or "twins," of physical items and by dropping NFTs connected to gaming.
NFTs have been long heralded (since their genesis) as the frontier of artistic expression in the digital age. Akin to one-of-a-kind artworks from the old masters, NFTs are the modern collectibles. Often called the future of art collection, the fashion world has been exploring the opportunity as well.
As fashion brands continue to explore artistic creativity, it only makes sense that they've begun to move into the digital world and take advantage of the new medium. Fashion has long acted as a reflection of the zeitgeist, or current times. Thus, it only seems appropriate that fashion-specific NFTs grow in prevalence along with the popularity of NFTs themselves.
So, how can the fashion industry further leverage the NFT space to build relationships with customers? With the rise of AR environments, digital closets are becoming more and more popular. As designers strive to build relationships with their audience, experts say it's becoming more likely that we'll see an increase in something called the "wear-to-earn" model.
In this model, designers will pay customers to wear their virtual pieces. Customers might be compensated in the form of cryptocurrency tokens, exclusive access to certain items, or virtual fashion pieces.
Dolce&Gabbana is poised to participate in the wear-to-earn model through their new launch, "D&G Family." Consumers that become a part of this virtual community will be granted exclusive access to certain physical Dolce & Gabbana items only available through the drop.
Dolce&Gabbana's UNXD will likely be the first luxury brand to feature a wear-to-earn model. However, other NFT conglomerates have already explored the concept. For example, davaproject is a decentralized ecosystem based around digital avatars. Within the ecosystem, avatars (called "DAVA") will be able to adopt wearable, digital items.
Initially, the project will support 10,000 DAVA and over 30,000 digital wearables. Davaproject will rank these wearables according to rarity parameters. Owners of these digital wearables will then gain access to exclusive drops, giveaways, and other perks as a reward for wearing these items.
Although it might seem like a somewhat strange or foreign concept, digital fashion isn't exactly new. The gaming skins market has been long established as a multibillion dollar industry.
What are gaming skins? Essentially, they're digital items that avatars can wear in games such as Fortnite. The game's marketplace features direct-to-avatar (D2A) purchases in which players can customize their avatars. The average player spends approximately $20 per month on skins.
This has in turn made an impact on the NFT world. Whether through offering in-game NFT collectibles, or virtual outfits housed on the blockchain available for purchase, fashion trends have gone digital.
Similar to the appeal to NFTs, these digital skins provide a sense of uniqueness and individuality to gamers' digital experiences. Fashion conglomerates have begun taking advantage of this phenomenon. They've been using the digital skins both to sell digital merchandise and to advertise their physical products.
Brands have also collaborated with well-established video games such as League of Legends to market their collections. LMVH and Riot Games collaborated to release an in-game collection back in 2019. So clearly, digital fashion isn't new, but NFTs are making it a much more established industry- and more lucrative for luxury brands.
By targeting the gaming market, luxury fashion brands are able to expand their audience into a younger generation. Casting this broader net serves as the perfect publicity stunt for fashion houses looking to expand into the digital market.
Digital fashion isn't limited only to the gaming market. Virtual fashion pieces have expanded to include products you can "wear" through the use of photo manipulation or augmented reality. There's been buzz in the fashion world regarding the ethics of digital fashion and how it might change the landscape of consumerism.
Approximately 50% of clothing items in the average person's wardrobe go unworn. This is a whopping amount of waste, and that waste is eliminated with digital fashion. This forms the basis for many of the arguments for a virtual wardrobe.
With digital products, people can "dress" themselves in pictures without needing to own a physical item. Many feel this reduces waste and eliminates many of the ethical concerns that come with buying fast fashion items.
One digital fashion company, DressX, launched recently in the summer of 2020. They now collaborate with digital designers, as well as create their own fashion designs, which they offer for purchase on their site. Unlike with NFTs, you pay using traditional currency rather than crypto.
Customers can "wear" DressX products on a photo or through the AR app. DressX founders Natalia Modenova and Daria Shapovalova created the company as a way to combat environmental abuses in the fashion industry.
The enterprise currently operates outside of the NFT space. However, they see NFTs and the blockchain as a natural extension of their current business model. By adding the collectability mindset to their products, they're able to expand their customer base.
DressX is currently working towards integration and collaboration with existing NFT marketplaces. They also hope to launch their own NFT marketplace that is specific to the fashion category.
Through digital clothes, possibilities become endless and imagination thrives. This all comes at a much lower environmental footprint.
NFTs are quite popular in the digital fashion world, but what about physical fashion? How do NFTs connect to physical products?
As we've established, the blockchain is quite useful for establishing the authenticity of a piece and its ownership. For status symbols in the fashion world, owning an NFT is a foolproof way to verify ownership. This is especially useful for collectors' items.
Hermès has tapped into this potential by releasing Birkin bag NFTs. The extravagantly expensive bags have long served as symbols of status. It only makes sense to move this status symbol into the digital space.
Shockingly, these NFTs have sold for even greater prices than the original physical bags. This further underscores just how attractive undeniable uniquity is to buyers.
Aside from simply replicating physical products, NFTs also serve as digital "twins" of the real thing. The winning bidder on each of these particular NFTs will receive an equally unique physical garment.
This concept hasn't been explored nearly as deeply as has strictly virtual fashion, but it has the potential to be big. Just as art collectors pride themselves on the rarity and on-of-a-kind nature of the work, so do fashion gurus. NFTs certainly have the potential to act as a sort of stamp of authenticity on a particular garment.
Tying in with NFT twins are exclusive drops. Brands like Adidas have been interweaving physical and digital items by giving NFT buyers exclusive access to physical products. Holders of the Adidas NFT line will have the ability to purchase special merch and receive other perks.
The exclusive physical merch is cobranded with several NFT creators, including the ever-popular Bored Ape Yacht Club. Punks Comics and GMoney, two other NFT creators, have also been consulting with Adidas on the drop.
The merch will feature designs reminiscent of the popular NFT creators' work. By catering to their audience's already well-established admiration of NFTs, Adidas is able to enter the space in a way that comes across as authentic to fans.
The idea of merging the digital with the physical isn't new to the NFT world. Karl Lagerfeld, a Paris-based artist and designer, has partnered with London street artist Endless. Together, they're creating a digital drop that features real-life perks (like exclusive access to a Paris show) for buyers.
As NFTs and fashion become more and more intertwined, luxury brands and aspiring artists alike have produced stunning projects. From gaming accessories to minting physical garments, there's been a wide range of activities in the space.
The NFT boom of this past year has yielded some interesting projects from a variety of creators. Whether from established brands or breakout conglomerates, these projects have taken the digital world by storm. We'll explore the top five projects of the year and what makes them so breathtaking.
Gucci is far from new to the world of digital fashion. In March of this year, they released a collection of AR sneakers, selling for around $12 USD per pair. However, the first NFT the fashion firm released was a short film created to celebrate the firm's 100th anniversary.
The film is a part of Gucci's Aria collection and features a collaboration with Balenciaga. The film sold for $25,000 in an auction, with all proceeds going towards UNICEF's mission towards COVID-19 vaccine availability.
The crypto artists FEWOCiOUS and RTFKT tapped into the incredibly robust sneaker market with digital sneakers. The partnership resulted in the release of three sneakers accompanied by digital designs. Prospective customers were able to "try on" the shoes via Snapchat prior to purchase.
Once users bid on the three designs, the duo sold over 600 pairs. Although users were able to redeem physical pairs of sneakers upon purchase, the true value lies in the digital merchandise.
And quite the value it was. The total revenue from the drop was over $3 million.
This wasn't RTFKT's only project in the fashion space this year. In fact, they were so successful in the world of fashion NFTs that Nike, Inc. ended up absorbing the studio.
Louis the Game is a project by Louis Vuitton created to celebrate founder and namesake Louis Vuitton's 200th birthday. It's a video game in which players follow Vivienne, a characterization of the iconic brand, through a virtual world. The objective is to collect virtual candles and postcards detailing the founder's life.
Throughout the game, the player collects 30 NFTs. However, these aren't your average NFT. While collectible, they're non-purchasable, meaning they cannot be resold.
This was a smart move on behalf of the fashion house. The video game industry is extremely lucrative and was recently valued at $180 billion. Especially with the rise of digital fashion and in-game wearables, getting into the gaming space is a smart move for fashion houses.
Louis Vuitton isn't the only one to move into the video game space. Burberry recently also collaborated with gaming company Mythical Games. Most famous for the game Blanko's Block Party, Mythical Games is far from new to the NFT world.
In the game, characters called "Blankos" live on a blockchain, and players are rewarded for playing with NFTs. Within the game, NFTs (including Burberry's) can be upgraded, sold, and traded. Burberry has become the first brand to make its debut within the game, making history at the intersection of gaming, fashion, and NFTs.
The limited-edition Burberry NFT within the game is dubbed "Sharky B." It takes the form of a shark figurine emblazoned with a TB monogram. Burberry also released NFT accessories within the game that can be used to adorn any character in-game as well.
Overpriced is truly a pioneer in the world of NFT fashion. They're self-described as "the world's first true NFT-driven fashion brand." Their debut piece, a hoodie, sold for over $26,000.
The physical hoodie is emblazoned with a code that, when scanned, provides access to a unique NFT that can be worn and shown off in public. The company also promises that should the hoodie be lost, stolen, or damaged, owners can request a new physical hoodie. The V-code on the old one will be invalidated, and thus, the new piece will become the original.
Clearly, NFTs are changing the fashion landscape. In the future, it's possible that the industry as we know it will forever be changed. By moving into the digital space, fashion houses are able to move into the future of fashion and target new markets.
For designers with traditional fashion backgrounds, the transition to the digital world hasn't been easy. Creating quality digital fashion often requires the mastery of complicated programs. This makes it quite difficult for designers without a tech background to break into the space.
However, the tools available to designers have been rapidly expanding. Digital fashion house The Fabricant has been working on their own program, The Fabricant Studio. It aims to allow those without 3D modeling knowledge to begin customizing their own digital garments.
Advancements like these open up the space for more people to begin contributing to the digital fashion world. By slowly breaking down the barriers to entry, The Fabricant aims to reduce inequality in the design space.
If you're looking for more NFT news, there's no doubt that the fashion industry will provide more content. As the intersection between fashion and the digital world grows, more designers are continuing to turn to the Metaverse as a medium.